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4. Which of the following statements are correct concerning a flexible short-term financial policy? 1. A flexible policy is most appropriate when carrying costs are low relative to shortage costs. II. A flexible policy entails the use of maintenance of large cash balances II. A flexible policy is associated with low costs of not having enough inventory on hand. The optimal current asset holdings are higher under a flexible policy than under a restrictive policy I and II only b. 1 and IIl only c. Il and III only II and IV only e 1. II, and IV only IV, a. 5. Randy's Meat Market has a 46-day collection period. The amount of cash that Randy collects each quarter is equal to: 46% of last quarter sales plus 54% of this quarter sales. a, b. 46 days of sales from last quarter plus 54 days of sales from this quarter. c. 44 days of sales from last quarter plus 46 days of sales from this quarter d, e. 51% of last quarter sales plus 49% of his quarter sales. 54% of last quarter sales plus 46% of this quarter sales. 6. A) B) C) D) E) Which of the following priods is the operating cycle equal to? Cash cycle- accounts payable period Inventory period- accounts receivable period Cash cycle + accounts payable period Inventory period- accounts receivable period-accounts payable period Accounts receivable period-inventory period 7.The practice of and procedures for moving cash from multiple banks into a firm's centralized bank account(s) is known as A) cash concentration B) strategic cash disbursement C) transfer flotation D) payables management E) float management A) In order to maximize their purchases of marketable securities B) Because there is a trade-off between the benefit and cost of liquidity C) Since most firms follow flexible policies of working capital management D) Because of the float the firm gains when it writes checks E) Because of the fluctuation in interest rates on marketable securities 8. It is important for any firm to determine its appropriate target cash balance